A Good Has a Price Elasticity of Demand Equal to 2.If

question 58

Multiple Choice

A good has a price elasticity of demand equal to 2.If an increase in supply lowers its price from $1.20 to $0.80,the percentage change in quantity demanded is

• A)an increase of 80 percent.
• B)a decrease of 80 percent.
• C)a decrease of 40 percent.
• D)an increase of 2 percent.
• E)an increase of 40 percent.

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Definitions:

Current Price

Current price typically refers to the present market price of a stock, bond, commodity, or any other financial asset, reflecting its worth based on supply and demand dynamics.

Coupon Rate

The yearly interest rate a bond yields, represented as a percentage of its par value.

Semiannually

Occurring twice a year; a term often used in finance to indicate payments or calculations made every six months.

Market Rate

The prevailing interest rate available in the market for loans or deposits, subject to fluctuation based on demand, supply, and governmental policy.